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Archive for January 9th, 2010

Hold The Presses: Saturn May Not Be R.i.p. After All

Saturn’s impending demise as an automaker may not be so near after all. When General Motors announced recently that they were planning to shed some brands either through sale or closure the Saturn brand was included as one of GM’s divisions that appeared to be highly vulnerable.

Automotive News is reporting something different regarding Saturn’s fate indicating that the brand could survive particularly if GM overhauls what was once a separate but wholly owned car company run by GM. Today Saturn is an outright GM division just like Chevrolet Pontiac Buick etc. but the brand still has something the other divisions don’t have: a solid dealer network built on the premise of treating the customer right.

That dealer network is 425 units strong and for GM to shut each dealer down would cost the automaker three to four million dollars each which translates to a maximum of 1.7 billion to shut down the dealerships alone. Back in 2003 when GM closed down Oldsmobile the automaker was forced to buy out dealers even if they were fortunate enough to switch to another company brand. That move was costly too and today’s cash strapped GM government loans or not would find shutting Saturn down to be a difficult move.

A separate sale of Saturn isn’t possible given that the automaker shares facilities platforms and everything else with GM’s other divisions. When the brand launched their first vehicles in 1990 Saturn’s factory platform and work force was unique to the company but the company was gradually assimilated by GM beginning later in the decade. Hummer on the other hand and Saab too can easily be sold off two brands which likely will not be part of the GM fold come 2010.

So where does that leave GM? Well the latest word is that the automaker will keep Saturn but overhaul its product line. Curiously this is something that has been taking place for the past several years and come 2014 the brand was to be fully integrated with Opel. Saturn and Opel would sell the same vehicles plus one or two other models exclusive to the American market. Now those plans appear to be up for grabs leaving Saturn’s future direction cloudy.

GM says that they will be holding meetings to determine the direction that Saturn should go to create a new business model for the brand. Talk of closing Saturn isn’t helping dealer confidence and it does nothing to encourage shoppers to visit Saturn show rooms. Let’s hope GM figures out what role Saturn will have in an overhauled company and gets that figured out as soon as possible.

About the writer:  Matthew C. Keegan is a freelance writer who resides in Cary North Carolina. Matt is a contributing writer for Andy’s Auto Sport an aftermarket supplier of quality parts including headlight bulbs and over cab lights.